After reading the half yearly reports i felt pretty depressed...

After reading the half yearly reports i felt pretty depressed that the share price tanked, the results were horrible, they were below what i was expecting i also have to admit i wasn't feeling too comfortable with my holdings after reading the announcement. A few weeks ago I went back and read the 17 December 2015 announcement. Please note the bold text. I will conduct a summary of this at the end. SGH made a big mistake by publishing this announcement in December and not in Jan/Feb after the 2 half yearly results.

" Slater and Gordon Limited (the Company) confirms that Slater and Gordon Lawyers (Australia) and Slater and Gordon Solutions (SGS), excluding noise induced hearing loss (NIHL) are continuing to trade in line with expectations. However, lower than expected trading results in segments of the business in the UK in November, coupled with a commencement....."

"Whilst the Company expects that the UK business will make a positive contribution to gross operating cash flow in December, cash timing differences and poorer than expected case resolution profiles will impact negatively on the gross operating cash flow results for the 6 months ending 31 December 2015."

As previously foreshadowed, year to date settlements have been slower than anticipated in Slater and Gordon Lawyers (UK) and the Slater Gordon Solutions (SGS) noise induced hearing loss (NIHL) portfolio. The withdrawal of guidance reflects the fact that whilst cases remain available for settlement in second half, having regard to year to date performance there is a risk that full year resolutions will not meet prior expectations.

While the first half as a whole has been difficult, the performance of the UK business has been improving during the course of the last few months and is expected to contribute positively to cash flow in December and during the remainder of the financial year.

The Company financiers have been kept informed of its position at all times. Slater and Gordon has more than $100million headroom with its banking facilities and this headroom is expected to increase as the financial year progresses.

Summary
SGH announced that they pretty much stuffed up the 2nd half year results, whats interesting to note that they were running on negative cashflows up until late November, December was the turn around. SGH notes poorer resolutions, now initially i thought that meant that they lost a lot of cases but thats not so, reading from the statement it states "settlements have been slow.... cases remain available for settlment in the SECOND HALF. We continue reading the announcment then we see that "UK business has been improving during the course of the last few months, expected to contribute positively to cash flow in December and during the remainder of the year. Whats even better is the fact that they state that the headroom for the loan is expected to increase as the year progresses. SGH stuffed up by announcing this before the second half yearly results came out.. this should have been announced after the results, providing everyone with a guide on how to read the financial reports.

What happens once OPEX cuts happen, they will be running profits.